International nonprofits struggling

U.S.-based international nonprofits, a small but significant division of the American charitable sector, are operating on slim cash margins and four in ten ran deficits in 2003, a new report says.

Combined revenues for the group in 2003 were $17.7 billion and expenses were $17.2 billion, says the Urban Institute report, which analyzes data from fiscal years 2001-03 from about 2,600 nonprofits with $25,000 or more in annual revenue.

The report, “The International Charitable Nonprofit Subsector: Scope, Size, and Revenue,” divides U.S.-based international nonprofits into three main categories.

Of the three-fourths involved in international development and relief assistance, almost four in 10 had negative operating margins in 2003.

Forty-four percent of organizations working to improve international understanding, and 47 percent of organizations concerned with international affairs, ran a deficit in 2003, the report says.

International nonprofits, however, are experiencing steady growth in both the number of organizations and their revenue, according to the report, with 2003 revenue increasing almost 15 percent in two years.

More than two-thirds of the organizations’ revenue comes from private contributions while 20 percent is covered by government grants, the report says, with groups with the largest budgets receiving the most government funding.

Organizations report that about 90 percent of their funds go to programs and services, with 7 percent going to administrative costs and 4 percent to fundraising.

Overall, international nonprofits make up only 2 percent of U.S. nonprofits and 2 percent of the revenue of the nonprofit sector, the report says.

The report uses data from the Urban Institute’s National Center for Charitable Statistics/GuideStar database.